Am I upbeat that our new homes division has had its best 4 months in the past two years…you bet! I interact with a lot of builders, developers, banks and real estate companies in our region and the number one question that I always get is, “So how’s business?” Then it is invariably followed by, “What do you think is causing the increase?” I know I am expected to deliver a credible response with justifications of how I arrived at my answer; however my response lately is “I just don’t know!”
I like to make sure that I’m keeping up with as much industry news as possible (although, let’s be honest, the news can be confusing, conflicting and contradictory leaving me feeling bogged down and overwhelmed!). On most days, I read two or three newspapers, several online real estate news wires and review all of the “leading economic indicators.” Combine that with my subscriptions to housing statistical reports in 3 markets and you’d think that I would have answers to just about any question thrown in my direction.
But, what I have concluded is that, if all those experts are having difficulty figuring out the real estate market, what could I possibly say that would sound convincing when asked why I think our market has improved? What I do know is that, when I poll our agents and managers and ask them about their increase in traffic and sales they tell me that customers are “just feeling better” about their economic situation and good old “consumer confidence” is the driver!
We still have over 10% unemployment, a forecast of record foreclosures to come, a dysfunctional financial system, a broken appraisal system and unrest in the Middle East. On top of that, there are very few economists projecting that we will be fully recovered from the housing recession before the end of 2012. That’s a lot of negative noise floating around and it appears that “consumer confidence” is the only thing strong enough to trump it. So now when I am asked “why is the market doing better”, I still say “I do not know” but I do follow it up with but I think it may be “Good Old Consumer Confidence”!
By Mike LaRuffa
